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What do stretchy pants, fat-loss drugs, and sport betting have in common? Each of these is powering some of the strongest mega-trends on Wall Street. Regardless of how sophisticated the underlying technology or service is, savvy investors understand that such trends ultimately drive earnings, and earnings drive stocks. Below are three industry titans that are benefitting from such trends, setting up technically, outperforming their industry group peers, and producing robust earnings:
Apparel: Lululemon
Lululemon is a popular athletic apparel and lifestyle brand known for its high-quality yoga and athletic wear. The company has gained a massive following by combining a unique, minimalist style activewear with functionality and comfort. Though the company came to prominence for its woman’s yoga wear, its success in other demographics is attributed to its emphasis on technical innovation, using performance fabrics and thoughtful design to enhance the overall workout experience. Like Wall Street juggernauts Apple and Tesla,the LULU brand has cultivated a strong community through its strong community and lifestyle image, fostering customer loyalty through initiatives like in-store yoga classes and community events.
A Consistent Earnings Winner
While the retail sector has struggled and are flat for the year, LULU has produced gains of nearly 30% year-to-date. That’s because LULU has consistently delivered double-digit earnings and sales for several years.LULU not only produces robust earnings; it tends to beat analyst expectations. LULU has produced positive earnings surprises for 13 straight quarters.
Because LULU is clearly best in breed, the stock should outperform should the retail sector find its footing. For investors who missed LULU’s initial move, the stock offers a second opportunity in the form of a post-EPS pullback to support.
Fat Loss Drug: Novo Nordisk
The typical American diet has played a significant role in the explosion in obesity due to its destructive combination of processed foods, added sugars, and unhealthy fats. Obesity is associated with an increased risk of severe health conditions, including type 2 diabetes, heart disease, hypertension, and cancer. Though many Americans are armed with this information, few take precautions and turn to calorie-dense foods out of convenience or lack of discipline.
For years, people have dreamed of a fat-loss drug that works. Novo Nordisk has made that dream a reality through its blockbuster drug Ozempic. The math is simple: NVO benefits from the mega-trend of obesity. As obesity levels continue to soar, Ozempic will benefit. Next year, analysts expect NVO to rake in a breathtaking $38 billion revenue.
Relative Strength Monster
Few stocks have shown the type of relative strength that NVO has displayed. While the Zacks Drugs Market Industry is down 11.5% year-to-date, NVO is up 46% and is set up to break out again.
Sports Betting: DraftKings
DraftKings is the most popular American sports gambling platform. The DKNG platform allows users to participate in daily and weekly fantasy sports competitions across various professional sports. Beyond fantasy sports, DraftKings has expanded its offerings to include traditional sports betting in regions where it is legal.
DKNG’s fundamentals make it abundantly clear that more and more Americans find entertainment in betting on games rather than simply watching them. Furthermore, DKNG is the undisputed leader in the industry because it is legally approved in more states than any of its competitors. After smashing Zacks Consensus Estimates last quarter, future estimates suggest healthy, robust, and sustained growth in the coming quarters.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Lululemon, Apple, Tesla, Novo Nordisk and DraftKings
For Immediate Release
Chicago, IL – November 17, 2023 – Today, Zacks Investment Ideas feature highlights Lululemon (LULU - Free Report) , Apple (AAPL - Free Report) , Tesla (TSLA - Free Report) , Novo Nordisk (NVO - Free Report) and DraftKings (DKNG - Free Report) .
3 Industry Titans Benefiting from Mega-Trends
What do stretchy pants, fat-loss drugs, and sport betting have in common? Each of these is powering some of the strongest mega-trends on Wall Street. Regardless of how sophisticated the underlying technology or service is, savvy investors understand that such trends ultimately drive earnings, and earnings drive stocks. Below are three industry titans that are benefitting from such trends, setting up technically, outperforming their industry group peers, and producing robust earnings:
Apparel: Lululemon
Lululemon is a popular athletic apparel and lifestyle brand known for its high-quality yoga and athletic wear. The company has gained a massive following by combining a unique, minimalist style activewear with functionality and comfort. Though the company came to prominence for its woman’s yoga wear, its success in other demographics is attributed to its emphasis on technical innovation, using performance fabrics and thoughtful design to enhance the overall workout experience. Like Wall Street juggernauts Apple and Tesla,the LULU brand has cultivated a strong community through its strong community and lifestyle image, fostering customer loyalty through initiatives like in-store yoga classes and community events.
A Consistent Earnings Winner
While the retail sector has struggled and are flat for the year, LULU has produced gains of nearly 30% year-to-date. That’s because LULU has consistently delivered double-digit earnings and sales for several years.LULU not only produces robust earnings; it tends to beat analyst expectations. LULU has produced positive earnings surprises for 13 straight quarters.
Because LULU is clearly best in breed, the stock should outperform should the retail sector find its footing. For investors who missed LULU’s initial move, the stock offers a second opportunity in the form of a post-EPS pullback to support.
Fat Loss Drug: Novo Nordisk
The typical American diet has played a significant role in the explosion in obesity due to its destructive combination of processed foods, added sugars, and unhealthy fats. Obesity is associated with an increased risk of severe health conditions, including type 2 diabetes, heart disease, hypertension, and cancer. Though many Americans are armed with this information, few take precautions and turn to calorie-dense foods out of convenience or lack of discipline.
For years, people have dreamed of a fat-loss drug that works. Novo Nordisk has made that dream a reality through its blockbuster drug Ozempic. The math is simple: NVO benefits from the mega-trend of obesity. As obesity levels continue to soar, Ozempic will benefit. Next year, analysts expect NVO to rake in a breathtaking $38 billion revenue.
Relative Strength Monster
Few stocks have shown the type of relative strength that NVO has displayed. While the Zacks Drugs Market Industry is down 11.5% year-to-date, NVO is up 46% and is set up to break out again.
Sports Betting: DraftKings
DraftKings is the most popular American sports gambling platform. The DKNG platform allows users to participate in daily and weekly fantasy sports competitions across various professional sports. Beyond fantasy sports, DraftKings has expanded its offerings to include traditional sports betting in regions where it is legal.
DKNG’s fundamentals make it abundantly clear that more and more Americans find entertainment in betting on games rather than simply watching them. Furthermore, DKNG is the undisputed leader in the industry because it is legally approved in more states than any of its competitors. After smashing Zacks Consensus Estimates last quarter, future estimates suggest healthy, robust, and sustained growth in the coming quarters.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.